Rx Roulette: Counterfeit Pharmaceuticals in Developing Nations

1. LeBow College of BusinessDrexel University Rx Roulette:Counterfeit Pharmaceuticals in Developing Nations Dr. Kristina M. Lybecker December 6, 2003 Prepared for the conference, “Markets for Pharmaceuticals and the Health of Developing Nations,” Toulouse, France, December 5-6, 2003.

2. “As early as the fourth century BC people were warned about the dangers of adulterated medicines, and despite all the advances made over the years this concern has not disappeared.” World Health Organization. “‘In the next ten years, spurious drugs will be the single biggest problem’ in public health.” Ranjit Roychoudhury, President of the Delhi Society for the Promotion of the Use of Rational Drugs, as quoted in The Lancet. “Some health officials in Africa have stated that counterfeit medicines are a greater public health threat than AIDS or malaria.” Harvey Bale, President of the International Federation of Pharmaceutical Manufacturers Associations (IFPMA), as quoted in The Lancet.

3. Introduction • Challenge to Public Health • Characteristics of the Problem • Facilitating Factors • Available Strategies to Combat Counterfeiting • Conclusions

4. Counterfeiting and Public Health • Mounting Evidence • Health Consequences • Less Visible Barrier to Access • Therapeutic Failure • Prolonged Illness & Death • Global Microbial Resistance • Loss of Confidence in the System • Squandered Resources • $43.5 billion annually

5. Dimensions of the Problem • Significant & Growing Problem • Definition • World Health Organization • U.S. FDA

6. CounterfeitingDefinition • “a counterfeit medicine is one which is deliberately and fraudulently mislabeled with respect to identity and/or source. Counterfeiting can apply to both branded and generic products and counterfeit products may include products with the correct ingredients, wrong ingredients, without active ingredients, with incorrect quantity of active ingredient or with fake packaging.” World Health Organization (1997)

7. Dimensions of the Problem • Estimates: HA! • Magnitude of the Problem: • World Health Organization estimate: 6% – 10% • Some developing nations: more than 80% • Drugs: Aspirin to Zyprexa • Nations: Global problem • Financial Impact: $43.5 billion/year • Sophistication: varied

8. Dimensions of the ProblemDrug Quality • In two studies analyzing counterfeit medications, the results show that: • 50 – 60% : no active ingredient • 15 – 20% : wrong active ingredient • 15 – 20% : incorrect quantity of active ingredient • 5% : correct active ingredient

9. Counterfeiting Specifics & Examples

10. Dimensions of the ProblemExamples • Aspirin: “Because tablet-making machines are easily obtainable, even counterfeit ‘aspirin’ tablets containing little or no acetylsalicylic acid can be profitable, especially at open-air markets such as those in African villages” McGregor 1997

11. Dimensions of the ProblemExamples • HIV and Cancer Drugs: “drugs to boost the immune system of cancer and HIV patients have become a favorite of counterfeiters. In one case . . . criminals realized a $28 million profit from a shipment of 11,000 boxes of counterfeit Epogen and Procrit, which is also often prescribed to cancer, AIDS and kidney-failure patients” Associated Press 2003

12. Dimensions of the ProblemExamples • Children’s Vaccines: “As many as 80,000 children in Nigeria have gotten fake meningitis vaccines. India has seen bogus polio vaccines” Knox 2003

13. Dimensions of the ProblemExamples • Ponstan: Authorities “interdicted millions of yellow tablets that were virtually indistinguishable from the genuine product – including the company logo. These tablets were made of boric acid, floor wax, and lead-based yellow paint used for road markings. Sacks of these ‘raw materials’ were stacked throughout the counterfeiter’s site” Christian 2001

14. Counterfeiting Operation

15. Counterfeiters GMP

16. Serostim® Source: FDA website

17. Viagra In October 2002, 1,233 packages of unapproved Viagra were found at the Miami international mail facility. Over 80,000 tablets were found at JFK airport.Counterfeit product found in Malaysia; it has appeared in Mexico. Counterfeit box and tablet package is excellent. Replicated the Pfizer logo, blister card, foil backing and hologram. (Source: PhRMA, Thanks to Dr. Marv Shepherd)

18. Zantac Manufactured in Taiwan, discovered in United Kingdom. Excellent packaging of counterfeit, even includes counterfeit package insert. (Source: PhRMA, Thanks to Dr. Marv Shepherd)

19. Deca-Durabolin Counterfeit Genuine An anemia product used to treat renal insufficiency was purchased in Mexico and illegally imported to the U.S. Packaging is very similar to original, but in testing the counterfeit product, it only contained sesame seed oil. (Source: PhRMA, Thanks to Dr. Marv Shepherd)

20. Ponstan Ponstan is an anti-inflammatory product. This counterfeit was found in Columbia. First is the yellow powder; it consist of boric acid, floor wax, yellow highway paint. Pressed into tablets and placed in foil packs with labeling. (Source: PhRMA, Thanks to Dr. Marv Shepherd)

21. Procrit® Three Batches of Counterfeit Procrit® (epoetin alfa) by Ortho Biotech, found March, 2003 Product contained no active ingredient and may contain bacterial contamination (Acinetobacter and Pseudomonas). (Source: Dr. Marv Shepherd)

22. Prozac Photos taken from a plant in Asia. Manufactured in China, shipped to Taiwan and from there shipped around the world. Package in counterfeit Lilly blister packs. There is no assurance of quality, manufacturing processes or conditions. (Source: Dr. Marv Shepherd)

23. Manufacturing Facility for Counterfeit Panadol (Source: PhRMA Thanks to Dr. Marv Shepherd)

25. Dimensions of the ProblemCommon Threads • Small numbers of very costly drugs • Large quantities of less costly drugs • Expensive branded drugs • Clear injectibles • Simple tablets

26. Facilitating FactorsWHO’s List Counterfeiting is facilitated where: • weak drug regulatory control and enforcement, • scarcity and/or erratic supply of basic medicines, • extended, relatively unregulated markets and distribution chains, • price differentials, • lack of effective intellectual property protection, • due regard is not paid to quality assurance World Health Organization 1992

27. Facilitating FactorsThe Attraction • Organized Crime • Less Dangerous • Less Risky • Difficult Detection • Naiveté of Law Enforcement • Negligible punishment • Enhanced IPRs • Changing Technology

28. Facilitating FactorsNegligible Punishment • “In Malaysia the maximum fine for manufacturing counterfeit medicine is 25,000 ringgit ($6,580). . . The law also allows for a maximum three-year jail sentence, but a representative of the Pharmaceutical Association of Malaysia says no one has ever done time for making fake medicine in Malaysia” Saywell & McManus 2002

29. Facilitating FactorsNegligible Punishment • In Vietnam, 64 per cent of all artesunate (a key antimalarial drug in Southeast Asia) samples tested were found to be fake. Nevertheless, while prison terms of “20 years have been given in Vietnam for trading in fake sildenafil (Viagra) . . . there have been no prosecutions of fake antimalarial traders” Newton et al. 2001

30. Facilitating FactorsEnhanced IPR Protection • Changing Market Conditions • Increased Intellectual Property Rights • Focus on two elements • Access to medicines • Research on neglected diseases • Exacerbating the Problems of Counterfeiting • “First pass” at Enforcement • “Wholehearted” approach to Enforcement

31. Facilitating FactorsChanging Technology • Desktop Publishing • Available Equipment on eBay • Distinctive bottles replaced by uniform vials • Internet sourcing

32. Strategies for Combating Counterfeiting • Parallel Imports • Local Production • Enforcement Efforts • Education

33. StrategiesParallel Imports • Disappointing Results • Israel, the Philippines and Kenya • Low-priced markets see prices increase • Evidence in EU • Variety of Packaging

34. StrategiesLocal Production • “DAP often did not advocate local production, particularly in countries with populations of less than 25 million . . . the value component in local-drug production was small and that quality and reliability of supplies were frequently questionable . . . DAP recommended that they start with packaging from bulk and only gradually move towards simple formulation of drugs” Lauridsen 1997

35. StrategiesLocal Production • Self-sufficiency solution • High Fixed Costs • Supplies • Questionable quality & reliability • Alternative: Bulk Purchase Programs

36. StrategiesEnforcement • Technology • Deter counterfeiters • Facilitate authentication • Raise the costs to the counterfeiter • Security features • Overt • Covert • Forensic

37. Conclusions • Critical Timing • Important Tradeoff • Access to safe medicines vs. rewards to innovation • Vulnerable Populations • Need for Change with Safeguards

38. Thank you for your attention.